Though Medicare and Medicaid are largely unrelated, they are often confused. Both are a means of paying for medical bills, but that is where the similarities end. Here are the answers to some frequently asked questions about Medicare and Medicaid that will help you understand each program.
What Are They?
Medicare is a federally administered system of health insurance.
Medicaid is a jointly funded federal and state health insurance program.
Who Are They For?
Medicare covers people who are over 65 years of age and over, certain people with disabilities, and people with ALS or End-Stage Renal Disease.
Medicaid covers low-income people, children, pregnant women, and aged, blind and/or disabled people who are eligible to receive federally assisted income maintenance payments.
How Are They Paid For?
Medicare is paid for through two trust fund accounts, which are primarily funded through payroll taxes and other sources like income taxes paid on Social Security benefits.
Medicaid is jointly funded by the federal government and states.
What Services Do Each Provide?
Medicare coverage is separated into two parts, A and B.
Part A is hospital insurance and helps cover inpatient care in hospitals and skilled nursing facilities, hospice care and home health care.
Part B is medical insurance and helps cover doctor visits, outpatient care, durable medical equipment, home health care and some preventative services.
There are also Medicare health plans available through private insurance companies. Medicare Advantage Plans, also known as Medicare Part C, cover Parts A and B and extra services that depend on the plan. Medicare Part D plans, which cover prescription drugs, are available as standalone plans or as part of some Medicare Advantage plans.
Medicaid coverage can vary by state, but some types of services are federally mandated, including:
- Lab and X-ray services
- Doctor and nursing services
- Family planning and midwife services
- Dental services
- Pediatric services
- Screening, diagnosis and treatment services (if under 21 years of age)